The raising of the capital of a company is subject to the traditional Common Law rules that are aimed at protecting the interests of the shareholders and the creditors of the company. Some of these rules have been incorporated in the Companies Act. There are other rules that govern the raising of capital by companies which are found in the Act and are not necessarily derived from Common Law.
It has been pointed out judicially that it is not an easy matter to give a definition of an insurance contract.1 Even statutes have not given a definition because of the risk of inadvertently excluding contracts which should be within their scope. However for regulatory purposes, it has been suggested that a contract of insurance is any contract whereby one party assumes the risk of an uncertain event which is not within his control, happening at a future time in which event the other party has an interest and under which contract the first party is bound to pay money or provide its equivalent if the uncertain event occurs.2 From this definition, an insurance contract must have the following aspects; first is a legal entitlement i.e. there must clearly be a binding contract and the insurer must be legally bound to compensate the insured, a right to be considered for a benefit which is only discretionary is not enough.